Focused Financial Advice for Special Needs Families

In the eyes of parents, special needs children are just like any other – mother and father want to take good care of them during their own lifetimes, and make sure they’ll have opportunities and won’t go without once the parents have passed away.

Setting up a savings account or leaving a large cash bequest seem like good ideas. Unfortunately, if anyone holds more than $2,000 in assets, they’re excluded from the benefits of many federal programs, including Medicaid and Social Security. If you leave too much money to a special needs child, they may find themselves locked out of helpful assistance. Even if you’re able to be exceptionally generous, it may not be enough to pay for the individual care and support the child requires.

The best thing to do is establish a trust structured to support people with special needs. The trust can provide funds to care for the child’s everyday needs and particular desires, without freezing them out of useful state programs for the differently abled.

Even if parents have little to invest in the trust initially, establishing one promptly is a good idea. Given the small amount of holdings that can block a person in need from obtaining federal assistance, it’s perfectly reasonable to start with a small sum and then build it up over time.

Next comes the will. Here, it is essential that the trust be named as the beneficiary and not the child in question. This is vital, because if your estate ends up in probate court (the reasons are myriad), a helpful judge might hand all or a portion of your estate to your special needs child, intending to do right, but causing great harm. We recommend getting it all in the indelible writing of a will without further delay.